Asian Markets Tumble as South Korea Halts Trading Amid Tech Sell-Off and Oil Price Surge

By Blessing Nweke

South Korea’s stock market was forced to suspend trading for 20 minutes on Monday after the benchmark Kospi index plunged nearly 9% within minutes of opening, highlighting growing investor concerns over technology stocks and rising geopolitical tensions in the Middle East.

The temporary halt was triggered by the country’s circuit breaker mechanism, designed to prevent panic selling during periods of extreme volatility. It marked the third time this year that trading has been suspended under the safeguard.

The sharp decline came amid a broader sell-off across Asian markets. Japan’s Nikkei 225 index dropped around 4%, recording its steepest one-day fall in three months as major technology shares came under pressure. Other regional markets, including Hong Kong’s Hang Seng Index and China’s Shanghai Composite, also traded lower.

Market analysts attributed the losses to a combination of factors, including concerns that investments linked to artificial intelligence may have become overvalued after a strong rally in recent weeks. Investors are increasingly seeking evidence that booming AI demand is translating into sustained corporate earnings.

Charu Chanana, chief investment strategist at Saxo, described the situation as a “messy mix” of shocks affecting markets, particularly technology-focused exchanges such as the Kospi and Nikkei.

The downturn was intensified by rising oil prices following renewed military exchanges between Iran and Israel, the first since a ceasefire agreement brokered with the United States in April. Brent crude climbed 3.7% to $96.50 per barrel, while U.S. crude gained 3.5% to $93.70.

Higher energy prices have renewed fears of persistent inflation and potential interest rate increases, adding to pressure on global equities. The market weakness followed a major technology-led sell-off on Wall Street last week, where the Nasdaq recorded its biggest decline in more than a year.

Despite the volatility, South Korean President Lee Jae-myung said domestic stocks remain “slightly undervalued” and expressed confidence in the market’s long-term prospects.